Community Broadband Case Study: Lit San Leandro

Tellus Venture Associates helps City of San Leandro develop an 11-mile fiber loop

Patrick Kennedy, a local entrepreneur, wanted to build a data center in the City of San Leandro. It would be his second location there, and he needed to connect it to the headquarters of his software company, OSI Soft.

He quickly discovered that high capacity broadband service is patchy in the business and industrial areas of the City. Digging around, he found a map of the fiber optic network that the City uses to control traffic signals. That network runs through an 11-mile conduit loop that reaches the central business district as well as many of the City’s industrial areas.

Patrick Kennedy

Realizing he could both meet the needs of his existing company and create a completely new venture, he approached the City with a proposal. He asked for permission to lease space in the City’s conduit infrastructure so he could build a dark fiber network that would support new network service providers and other businesses.

Tellus Venture Associates was retained by the City to evaluate the project and provide expert assistance in negotiating an agreement that would protect the City’s interests while meeting the its economic development goals. We worked with the City’s Business Development staff to develop the lease agreement and begin work on a comprehensive commercial broadband strategy plan. The contract with Kennedy’s new fiber company was approved by the San Leandro City Council on 17 October 2011.

FCC chair Julius Genachowski at San Leandro’s Gigabit Cityevent.

The result is Lit San Leandro, a $2 million project that will see the construction of a city-wide middle mile fiber network, completed in 2013.

The agreement begins with a 20-year renewable term. Revenue to the City grows as the project becomes profitable. It gives the City ownership of a considerable amount of capacity on the new network, which will support the growth of future municipal services and guarantee that businesses will have the resources they need to locate and grow in San Leandro.

In February 2013, the chairman of the Federal Communications Commission, Julian Genachowski, attended a demonstration of Lit San Leandro and toured the city to see the impact the project is having.

“It’s a wonderful thing that San Leandro is doing here, and OSIsoft and Lit San Leandro,” he said. “You join a small but important number of communities that share your vision.”

“We need the U.S. to have a critical mass of business and residential subscribers for super fast Internet, one gigabit Internet,” he said. “One gig or multi-gig networks will lead to innovation that we can’t even imagine. If we build fast networks innovation will come.”

He urged local communities to adopt best broadband practices, such as “dig once” policies, where fiber optic lines are installed any time a trench is dug, for water or electric lines or any other reason. No surprise, San Leandro is already on track to do that.

“This is a model for the country,” Genachowski told San Leandro leaders. “It’s so rewarding to me personally to see what we saw here today.”